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Indebtedness | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
Indebtedness | Indebtedness The following summarizes our debt activity (both current and non-current) for the year ended December 31, 2018:
| December 31, 2017 |  | Borrowings |  | Repayments |  | Other (4) |  | December 31, 2018
Revolving loans | $ | — |  |  | $ | 199.4 |  |  | $ | (193.0 | ) |  | $ | — |  |  | $ | 6.4 |
Term loan (1) | 347.7 |  |  | — |  |  | — |  |  | 0.4 |  |  | 348.1 |
Trade receivables financing arrangement (2) | — |  |  | 123.0 |  |  | (100.0 | ) |  | — |  |  | 23.0 |
Other indebtedness (3) | 9.1 |  |  | 14.2 |  |  | (19.0 | ) |  | — |  |  | 4.3 |
Total debt | 356.8 |  |  | $ | 336.6 |  |  | $ | (312.0 | ) |  | $ | 0.4 |  |  | 381.8 |
Less: short-term debt | 7.0 |  |  |  |  |  |  |  |  |  |  |  | 31.9 |
Less: current maturities of long-term debt | 0.5 |  |  |  |  |  |  |  |  | 18.0 |
Total long-term debt | $ | 349.3 |  |  |  |  |  |  |  |  | $ | 331.9 |
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(1) | The term loan is repayable in quarterly installments of 1.25% of the initial loan amount of $350.0, beginning in the first quarter of 2019, with the remaining balance payable in full on December 19, 2022. Balances are net of unamortized debt issuance costs of $1.9 and $2.3 at December 31, 2018 and December 31, 2017, respectively.
(2) | Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At December 31, 2018, we had $27.0 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $23.0. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses.
(3) | Primarily includes balances under a purchase card program of $2.5 and $2.8, capital lease obligations of $1.8 and $2.1, and borrowings under a line of credit in China of $0.0 and $4.1, at December 31, 2018 and 2017, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.
(4) | “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, debt issuance costs incurred in connection with the term loan, and the impact of amortization of debt issuance costs associated with the term loan.
Maturities of long-term debt payable during each of the five years subsequent to December 31, 2018 are $18.0, $18.0, $17.9, $297.8, and $0.1, respectively. Senior Credit Facilities On December 19, 2017, we amended our senior credit agreement (the “Credit Agreement”) to, among other things, extend the term of each facility under the Credit Agreement (with the aggregate of each facility comprising the “Senior Credit Facilities”) and provide committed senior secured financing with an aggregate amount of $900.0. On November 16, 2018, we elected to reduce our participation foreign credit instrument facility commitment and our bilateral foreign credit instrument facility commitment by $35.0 and $15.0, respectively, which resulted in a reduction of our committed senior secured financing from $900.0 to $850.0. The components of our senior secured financing (each with a final maturity of December 19, 2022) were as follows as of December 31, 2018:
• | A term loan facility in an aggregate principal amount of $350.0;
• | A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $200.0;
• | A global revolving credit facility, available for loans in Euros, GBP and other currencies, in an aggregate principal amount up to the equivalent of $150.0;
• | A participation foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $110.0 (previously $145.0); and
• | A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $40.0 (previously $55.0).
In connection with the reduction of our foreign credit instrument facility commitments as noted above, we recorded a charge of $0.4 to “Loss on amendment/refinancing of senior credit agreement,” during the fourth quarter of 2018 associated with the write-off of the unamortized deferred financing fees related to this previously available issuance capacity of $50.0. In connection with the December 2017 amendment of our Credit Agreement, we recorded a charge of $0.9 to “Loss on amendment/refinancing of senior credit agreement” related to the write-off of unamortized deferred financing costs. During 2016, we reduced the issuance capacity of our foreign credit instrument facilities resulting in a charge of $1.3 to “Loss on amendment/refinancing of senior credit agreement” associated with the write-off of unamortized deferred financing costs. The above amendment of our Credit Agreement also:
• | Adjusts the maximum aggregate amount of additional commitments we may seek, without consent of existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility, and/or the bilateral foreign credit instrument facility, to (i) the greater of (A) $200.0 or (B) our Consolidated EBITDA for the preceding four fiscal quarters, plus (ii) an amount equal to all voluntary prepayments of the term loan facility and the voluntary prepayments accompanied by permanent commitment reductions of revolving credit facilities and foreign credit instrument facilities, plus (iii) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio for the prior four fiscal quarters does not exceed 2.75 to 1.00 (with the provisions described in clauses (ii) and (iii) being essentially unchanged from the previous agreement);
• | Permits unlimited investments, capital stock repurchases and dividends, and prepayments of subordinated debt if our Consolidated Leverage Ratio, after giving pro forma effect to such payments, is less than 2.75 to 1.00 (2.50 to 1.00 prior to the amendment);
• | Increases the Consolidated Leverage Ratio that we are required to maintain as of the last day of any fiscal quarter to not more than 3.50 to 1.00 (or 4.00 to 1.00 for the four fiscal quarters after certain permitted acquisitions) and included certain add-backs in the definition of consolidated EBITDA used in determining such ratio; and
• | Adjusts per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans, in each case based on the Consolidated Leverage Ratio, to be as follows:
Consolidated Leverage Ratio |  | Domestic Revolving Commitment Fee |  | Global Revolving Commitment Fee |  | Letter of Credit Fee |  | Foreign Credit Commitment Fee |  | Foreign Credit Instrument Fee |  | LIBOR Rate Loans |  | ABR Loans
Greater than or equal to 3.00 to 1.0 |  | 0.350 | % |  | 0.350 | % |  | 2.000 | % |  | 0.350 | % |  | 1.250 | % |  | 2.000 | % |  | 1.000 | %
Between 2.25 to 1.0 and 3.00 to 1.0 |  | 0.300 | % |  | 0.300 | % |  | 1.750 | % |  | 0.300 | % |  | 1.000 | % |  | 1.750 | % |  | 0.750 | %
Between 1.50 to 1.0 and 2.25 to 1.0 |  | 0.275 | % |  | 0.275 | % |  | 1.500 | % |  | 0.275 | % |  | 0.875 | % |  | 1.500 | % |  | 0.500 | %
Less than 1.50 to 1.0 |  | 0.250 | % |  | 0.250 | % |  | 1.375 | % |  | 0.250 | % |  | 0.800 | % |  | 1.375 | % |  | 0.375 | %
We are the borrower under each of the above facilities, and certain of our foreign subsidiaries are (and we may designate other foreign subsidiaries to be) borrowers under the global revolving credit facility and the foreign credit instrument facilities. All borrowings and other extensions of credit under the Credit Agreement are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties. The letters of credit under the domestic revolving credit facility are stand-by letters of credit requested by SPX on behalf of any of our subsidiaries or certain joint ventures. The foreign credit instrument facility is used to issue foreign credit instruments, including bank undertakings to support our foreign operations. The interest rates applicable to loans under the Credit Agreement are, at our option, equal to either (i) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.5%, (b) the prime rate of Bank of America, N.A., and (c) the one-month LIBOR rate plus 1.0%) or (ii) a reserve-adjusted LIBOR rate for dollars (Eurodollars) plus, in each case, an applicable margin percentage as previously discussed, which varies based on our Consolidated Leverage Ratio (as defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings and analogous instruments and net of cash and cash equivalents not to exceed $150.0) at the date of determination to consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, two, three or six months (and, if consented to by all relevant lenders, twelve months) for Eurodollar borrowings. The weighted-average interest rate of outstanding borrowings under our Senior Credit Facilities was approximately 4.3% at December 31, 2018. The fees and bilateral foreign credit commitments are as specified above for foreign credit commitments unless otherwise agreed with the bilateral foreign issuing lender. We also pay fronting fees on the outstanding amounts of letters of credit and foreign credit instruments (in the participation facility) at the rates of 0.125% per annum and 0.25% per annum, respectively. The Credit Agreement requires mandatory prepayments in amounts equal to the net proceeds from the sale or other disposition of, including from any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to other exceptions) by SPX or our subsidiaries. Mandatory prepayments will be applied to repay, first, amounts outstanding under any term loans and, then, amounts (or cash collateralize letters of credit) outstanding under the global revolving credit facility and the domestic revolving credit facility (without reducing the commitments thereunder). No prepayment is required generally to the extent the net proceeds are reinvested (or committed to be reinvested) in permitted acquisitions, permitted investments or assets to be used in our business within 360 days (and if committed to be reinvested, actually reinvested within 180 days after the end of such 360-day period) of the receipt of such proceeds. We may voluntarily prepay loans under the Credit Agreement, in whole or in part, without premium or penalty. Any voluntary prepayment of loans will be subject to reimbursement of the lenders’ breakage costs in the case of a prepayment of Eurodollar rate borrowings other than on the last day of the relevant interest period. Indebtedness under the Credit Agreement is guaranteed by:
• | Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and
• | SPX with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participation foreign credit instrument facility and the bilateral foreign credit instrument facility.
Indebtedness under the Credit Agreement is secured by a first priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries (with certain exceptions) held by SPX or our domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreign subsidiaries (with certain exceptions). If SPX obtains a corporate credit rating from Moody’s and S&P and such corporate credit rating is less than “Ba2” (or not rated) by Moody’s and less than “BB” (or not rated) by S&P, then SPX and our domestic subsidiary guarantors are required to grant security interests, mortgages and other liens on substantially all of their assets. If SPX’s corporate credit rating is “Baa3” or better by Moody’s or “BBB-” or better by S&P and no defaults then exist, all collateral security is to be released and the indebtedness under the Credit Agreement would be unsecured. The Credit Agreement requires that SPX maintain:
• | A Consolidated Interest Coverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated adjusted EBITDA for the four fiscal quarters ended on such date to consolidated cash interest expense for such period) as of the last day of any fiscal quarter of at least 3.50 to 1.00; and
• | As previously discussed, a Consolidated Leverage Ratio as of the last day of any fiscal quarter of not more than 3.50 to 1.00 (or 4.00 to 1.00 for the four fiscal quarters after certain permitted acquisitions).
The Credit Agreement also contains covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make investments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, enter into sale and leaseback transactions, or engage in certain transactions with affiliates, and otherwise restrict certain corporate activities. The Credit Agreement contains customary representations, warranties, affirmative covenants and events of default. As previously discussed, we are permitted under the Credit Agreement to repurchase our capital stock and pay cash dividends in an unlimited amount if our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) less than 2.75 to 1.00. If our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) greater than or equal to 2.75 to 1.00, the aggregate amount of such repurchases and dividend declarations cannot exceed (A) $50.0 in any fiscal year plus (B) an additional amount for all such repurchases and dividend declarations made after the Effective Date equal to the sum of (i) $100.0 plus (ii) a positive amount equal to 50% of cumulative Consolidated Net Income (as defined in the Credit Agreement generally as consolidated net income subject to certain adjustments solely for the purposes of determining this basket) during the period from the Effective Date to the end of the most recent fiscal quarter preceding the date of such repurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit) plus (iii) certain other amounts. At December 31, 2018, we had $311.6 of available borrowing capacity under our revolving credit facilities after giving effect to borrowings under the domestic revolving loan facility of $6.4 and $32.0 reserved for outstanding letters of credit. In addition, at December 31, 2018, we had $30.1 of available issuance capacity under our foreign credit instrument facilities after giving effect to $119.9 reserved for outstanding letters of credit. At December 31, 2018, we were in compliance with all covenants of our Credit Agreement. Other Borrowings and Financing Activities Certain of our businesses purchase goods and services under a purchase card program allowing for payment beyond their normal payment terms. As of December 31, 2018 and 2017, the participating businesses had $2.5 and $2.8, respectively, outstanding under this arrangement. We are party to a trade receivables financing agreement, whereby we can borrow, on a continuous basis, up to $50.0. Availability of funds may fluctuate over time given changes in eligible receivable balances, but will not exceed the $50.0 program limit. The facility contains representations, warranties, covenants and indemnities customary for facilities of this type. The facility does not contain any covenants that we view as materially constraining to the activities of our business. In addition, we maintain line of credit facilities in China and South Africa available to fund operations in these regions, when necessary. At December 31, 2018, the aggregate amount of borrowing capacity under these facilities was $20.0, while the aggregate borrowings outstanding were $0.0.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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